January 30, 2017 | IP Buzz

IPR Estoppel Applies Only to Grounds Instituted

3 min

Inter partes review (IPR) is beneficial because an accused infringer can invalidate a patent (35 U.S.C. §§ 102-103) before the Patent Trial and Appeal Board (PTAB) on a lower evidentiary standard, shorter timeline, and reduced cost as compared to a district court. To offset this gain, the accused infringer is supposed to be estopped under 35 U.S.C. § 315(e)(2) from asserting certain prior art in the district court litigation. Recent cases, however, have narrowly interpreted estoppel such that it applies only to prior art instituted by the PTAB.

The District Court Cases

In Intellectual Ventures I LLC v. Toshiba Corp., No. 13-453, 2016 U.S. Dist. LEXIS 174699 (D. Del. Dec. 19, 2016), the plaintiff moved for summary judgment that the defendants were estopped from asserting "invalidity challenges" based on a parallel IPR in which the PTAB invalidated certain claims. Id., *37-38. The plaintiff argued that one of the grounds was "raised" in the IPR, and the other invalidity grounds "could have been raised," given that the patents and publications were publicly available. Id. After canvassing a relevant Federal Circuit authority on estoppel, the district court determined that defendants were estopped in the district court on only the one ground actually raised in the IPR but "may present the . . . [other] invalidity grounds at trial." Id., *37-38.

Feeling the prior decision on estoppel was "incomplete," the same court thereafter issued another decision. Toshiba Corp., 2017 U.S. Dist. LEXIS 3800, at *2-3 (D. Del. Jan. 11, 2017). After considering the parties' arguments and relevant authorities, the court delineated estoppel as follows:

  • Grounds Instituted – Estoppel applies. Id. ("everyone agrees that estoppel applies to grounds for invalidity upon which the Board instituted review in the IPR proceeding").
  • Grounds Raised Not Instituted – Estoppel does not apply. Id. ("I believe that there likewise can be no dispute that estoppel does not apply to invalidity grounds that were raised by a petitioner in an IPR, but rejected by the Board as instituted grounds"); see also Depomed, Inc. v. Purdue Pharma L.P., No. 13-cv-571, Dkt. No. 238, at 16 (D. N.J. Nov. 4, 2016) ("if an invalidity ground is raised in a petition for IPR, but the PTAB declines to institute an IPR as to that invalidity ground, the estoppel provisions of 35 U.S.C. § 315(e) do not apply to said invalidity ground because it was not raised nor could it have reasonably been raised during that IPR.") (internal citation omitted).
  • Grounds Not Raised but Reasonably Could Have Been – Estoppel does not apply. Toshiba Corp., 2017 U.S. Dist. LEXIS 3800, at *4-5 ("I am not inclined to change my original decision . . . . Therefore, Toshiba is not estopped from presenting . . . [the invalidity] combination at trial."); see also Depomed, Dkt. No. 238, at 16.

The Practical Impact of Narrow Estoppel

  • Reinforces the advantages of filing an IPR during litigation with minimal consequences. It also raises the question of whether a party (cost permitting) should plan to file multiple rounds of IPRs in case the first set is not instituted.
  • Permits an accused infringer (and its expert) in a district court litigation to locate and rely on additional prior art. This could be especially valuable if the accused infringer has already reviewed IPR filings: patent owner and PTAB's analysis of prior art and claim construction.